As Apple, DOJ Face Off In Ebook Trial, The Government Spells Out Its Case

As
Apple and the Department of Justice met in court today to argue over the government's claim that Apple "conspired" with five book publishers in 2009 to raise the prices of ebooks, the DOJ released an 81-page slide presentation that lays out its case against the company.

Apple is the lone holdout. The publishers — Hachette, HarperCollins Publishers, Penguin Group, MacMillan and Simon & Schuster — have all settled since the DOJ made its claims in April 2012.

The federal judge presiding in New York federal court said last week that the government has a strong case. “I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that,” U.S. District Judge Denise Cote said in a pretrial hearing on May 23 in New York. Cote, who is hearing the case without a jury, also said that she's been working on a draft of a written decision based mostly on the evidence already submitted, which are emails and correspondence exchanged between December 2009 and January 2010. She also said that no final decision will be made until after the trial.

For those who haven't been following the drama, here's a recap:

Apple and the book publishers, unhappy with how Amazon had set what they deemed to be an artificially low price for ebooks at $9.99 after it launched its Kindle e-book reader, agreed on a plan where they would set the prices higher. Basically, they decided to ditch the so-called “wholesale model” — where publishers sell their wares to retailers, who then set the price — and instead adopted an “agency model,” where the publishers tell the retailers (like Apple and Amazon) what the final price of the book should be and what margin the retailer can earn out of the final price. Apple got MFN – most-favored nation pricing, with a guaranteed 30 percent “commission” on each e-book sold, publishers were able to set e-book pricing $3 to $7 higher than Amazon’s, and consumer’s got stuck with higher prices, according to the government.

Most of the emails cited as evidence -- including those by former Apple CEO Steve Jobs, iTunes chief Eddy Cue and some of the CEOs of the publishing firms -- have been previously released (you can find all the evidence here.) But the DOJ deck does a good job of presenting the case in an easy to follow format. You can read it here or peruse it below.